Cross-Border Trade: Opportunities and Challenges for Merchants

In the increasingly interconnected global economy, ambitious merchants must develop forward-looking strategies to sell across borders and thereby ensure long-term growth. As current analyses by GlobalData predict, the volume of cross-border transactions in Europe alone will increase by 58 percent by 2028. These developments are being driven by global initiatives such as the G20 roadmap, which aims for improved efficiency, transparency, and cost reduction of international payments by 2030. Nevertheless, the global payment environment remains fragmented. Merchants are challenged to implement payment solutions that take into account the regulatory complexities of each market and enable seamless transactions across a growing number of local payment methods. The complexity of the payment landscape continues to pose a significant challenge, hindering business processes and excluding millions of consumers, particularly in emerging markets. Many merchants rely on outdated technologies and make marginal modifications to existing banking structures instead of addressing fundamental infrastructure aspects. An essential factor in developing an appropriate payment strategy is understanding the varying consumer behavior patterns and payment preferences in different markets. These can vary significantly not only between but also within regional blocks. Within the European Union, for example, the integrated internal market allows many merchants to expand their reach and tap into new customer segments. However, the assumption that a single payment method can meet the needs of all markets remains a common mistake. Even in neighboring countries like Germany and France, payment methods are highly diversified. While France remains card-dominated with a card share of 52 percent in online purchases, in Germany, Europe's second-largest e-commerce market, the digital wallet has established itself as the preferred payment method with 33 percent. In addition to consumer preferences, regulatory changes must also be considered. Germany, for example, is facing significant changes in the payment sector: Sofort has been integrated into Klarna, and the Giropay online payment system is set to be discontinued by the end of the year. Merchants must respond swiftly to optimize their payment systems and remain competitive.